What happened

Shares of Virgin Galactic (NYSE:SPCE) are up 5.1% in 9:50 a.m. EDT trading on the Nasdaq Wednesday. There doesn't appear to be any specific news item to explain the spike in share price.

But there is news to explain why it won't last.

An arrow rises over a cityscape and then breaks, pointing down.

Image source: Getty Images.

So what

It's been more than a year now since Sir Richard Branson engineered the IPO of Virgin Galactic as a way to enable individual investors to "own a little bit of a spaceship company." Virgin Galactic may have been the only way for an investor to invest directly in a pure-play spaceship company in 2019, but in 2021, that may no longer be true.

This morning, the Stable Road Acquisition Corporation (NASDAQ:SRAC) SPAC announced that it will bring privately owned "spaceship company" Momentus public through a reverse-merger IPO of its own.  

Momentus isn't a human spaceflight company like Virgin Galactic, but it is a pure-play spaceship company. Momentus builds space tugs that launch to orbit and then use their engines to move around other satellites. Last year, it signed an agreement to ride a SpaceX Falcon 9 to orbit on its maiden flight, and since then, it's signed up at least $40 million worth of customers wanting to use its tugs to shift their satellites into desired orbits.  

Now what

At an estimated $1.2 billion in enterprise value upon its IPO, a publicly traded Momentus will cost barely 25% of what Virgin Galactic costs, making it look like a relative bargain to Sir Richard Branson's space-SPAC pioneer. Perhaps more importantly, by the time Momentus IPOs "in early 2021," it will arrive with contracts in hand and revenue flowing. We can't say the same thing for Virgin Galactic, which has yet to conduct its first commercial spaceflight, and may not accomplish that before Momentus IPOs.

If Momentus steals Virgin Galactic's thunder next year and becomes the first pure-play space company that's actually a functioning business, that could be bad news for Virgin Galactic's stock price. No longer the only space game in town, Virgin Galactic could soon be going down.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.